When contractors are unsavory not unsuitable

Tuesday - 6/29/2010, 10:31am EDT

Steve Ryan, head of the government strategies group, McDermott Will & Emery

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By Dorothy Ramienski
Internet Editor
Federal News Radio

Washington eyebrows rose when the CIA and the State Department awarded contracts worth $240 million dollars to Xe Services, formerly known as Blackwater.

The company is controversial because of a 2007 shooting incident in Baghdad involving Blackwater security guards that left 17 Iraqi civilians dead.

It has also received unfavorable mentions in Commission on Wartime Contracting reports.

What is the right course of action for agencies in dealing with companies that might be unpopular but submit favorable bids and are deemed capable of performing?

Steve Ryan is head of the government strategies group at McDermott Will & Emery, and a former federal prosecutor. He also is a former representative of Erik Prince, former head of Blackwater USA.

"The company is a company that has succeeded in doing its mission in Iraq and Afghanistan. They've never lost a [protected person] until the recent bombing at the CIA station in Afghanistan. . . . They do a very good job, but they are, indeed, controversial. It was not the U.S. Government that kicked them out of Iraq, but the Iraqi government. The fact that the U.S. Government still uses them in Afghanistan is a reflection that they're considered very good at their mission."

Currently, he said, Xe does go into procurement with a decidedly different and more negative reputation that other contractors because of the shooting in Nisour Square in Baghdad. Because of this, when Xe is chosen it means that they probably did have the best solution available.

"When you see that, you know that the contracting personnel knew that they would be criticized -- potentially -- for it . . . And that they have to be able to defend that judgement. It is an interesting business and being controversial is not what you want to be as a federal contractor. You want to be more milk toast, but it's not a milk toast business defending people in those countries."

Ryan explained that the award didn't happen in a vacuum.

"These kinds of decisions, when they perk up the line, are going to get some attention. On the other hand, I suspect if you've been to Iraq or Afghanistan as a Congressman, you've been protected by Xe. In other words, a lot of the congressional protection that has occurred is by them, and I think a lot of members have come back -- whatever their political persuasion or their concern about the Nansir Square issue -- they come back talking about the professionalism of the guards who defended them."

In addition to the name change, he said the company has brought in new supervisors and policies.

"You have a totally self-selected, volunteer force and, frankly, they have a lot of very good people to choose from. So, the personnel that they're offering really like that kind of a personal system that allows them, for example, to be home for a high school graduation and then be home again. . . . They get very good personnel. "

The public relations disasters happen when firing incidents occur. These have dropped dramatically, he said, after the new procedures and oversight were required.